Israel's Shekel Down to Six-Month Low as GDP Data Disappoint

Israel's shekel fell to a six-month low on Monday as data over the weekend showed the country's economic growth slowed sharply in the second quarter.

Israel economy expanded only 1.7% year-on-year in Q2 after growing 2.8% in Q1 and compared with last year's Q2 reading of 5.3%, the statistics bureau said on Sunday.

Private consumption growth slowed to 3.1% from 5.4% in Q2 last year while the rate of expansion of government consumption dropped to 4.2% from 7.3%.

Export of goods and services fell 17.7% after rising 0.1% in the first quarter and 5.9% in Q2 last year, data released by the Central Bureau of Statistics of Israel showed.

USD/ILS soared to 3.5094 on 18 August, its highest since late February, and down 0.53% from Friday's close.

The shekel had weakened sharply on 7 August following aggressive central bank intervention as the fundamental rally in the Middle East nation's currency had been restricting its trade prospects.

Now, with the help of a weaker than expected growth data, Israel's currency has fallen nearly 3% against the US dollar, more than reversing the gains since the end-2013 level of 3.4721.

Israel's currency and stock markets have been upbeat despite the ongoing turbulence and the uncertainty surrounding its neighbourhood relations as the country's trade prospects remained intact.

At 13.15 GMT, the Tel Aviv 25 equity index was down 0.62% showing the impact of the GDP data on the wider market.

At 1,378.5, the index, however, remained above the support line of 1,370 being held since March.